Last month, the New York Attorney General (NYAG) brought a lawsuit against Valve accusing the company of promoting “illegal gambling” through its randomized in-game loot boxes. On Wednesday, Valve issued its first public comment on the case, comparing its digital loot boxes to randomized real-world purchases like blind-bagged toys or packs of trading cards.
“Generations have grown up opening baseball card packs and blind boxes and bags, and then trading and selling the items they receive,” Valve wrote. “On the physical side, popular products used in this way include baseball cards, Pokemon, Magic the Gathering, and Labubu.”
Though that may seem like an apt comparison on the surface, Valve’s loot boxes differ from these real-world examples in large part because of Valve’s control of the Steam Marketplace, which serves as the only legitimate way to exchange or resell those items. While owners of real-world items are free to trade or sell them however they want, Valve has cracked down on many third-party sites that enable the exchange of in-game items—especially when those items are used as glorified chips for gambling games.
Lawyers told Ars last month that Valve’s control of that marketplace—and its 15 percent commission on item resale—helps establish the inherent economic value of the randomized items it sells, both to players and to Valve itself. That could be a crucial legal element in a courtroom in turning a mere “random purchase” into legally defined “gambling.”
Edit: Hey everyone, you can disregard the above comment by TehPers, because they clarified that they actually aren’t claiming booster packs are illegal gambling (though they’re now very upset I pointed that out here, rather than leaving it buried further down):
;P
In US law, at least, there’s no gambling because there’s no wager on an outcome involved. You are paying a fixed price, and there is no bet on a specific outcome. So while socially and culturally we might view TCGs as a form of gambling merely due to the random-chance-of-good-prize aspect, legally they do not fulfill the definition, including in NY State.
As the article notes, NYAG is likely to argue that loot boxes and TCGs are not the same, because of Valve’s ownership of the resale market, unlike TCGs (and in fact, Valve even brags about shutting down accounts and sites that try to work outside of their market). That could be used to draw a parallel to “bookies”, who oversee the exchange of prize monies, and for which there is no equivalent in TCGs or physical gachapons like Labubus.
Thank you for clarifying to all of us that you do not comment in good faith. It makes it much easier for me to know which people to block.
Frankly, I don’t mind. I don’t love being accused of posting in bad faith and berated just because you forgot what you originally posted. Cheers.
Flagging @TehPers@beehaw.org on this response, as it applies to both of you. You’re reasonable, longtime, constructive members on Beehaw. Maybe someone’s having a bad day, but it saddens me to see the two of you going at each other. I don’t feel there’s a rift here, just disagreement over wording.
This said, we’re all adults. I’m just more confused than anything, and I’m sure as fuck not going to take a side. This interaction wasn’t Beeing nice.
US law does not view TCGs as gambling, but by the colloquial definition, it is gambling. You say there’s no wager on an outcome. The wager is the price you spend on a pack, and the outcome is the resale value of the contents of the pack.
As for the case against Valve in particular, I make no claims as to what they should or shouldn’t argue in the case. I am not a lawyer. I can’t imagine most people in this instance are either.
By this definition, buying anything is a wager. You’re not betting on a specific outcome in that definition, which is the “gamble” part of “gambling”.
What I think you mean is something akin to, “the wager is that the price you spend is less than the resale value of the cards you receive”, but that also makes e.g. buying items at a yard sale in hopes of reselling for more “gambling”, which is definitely not something people would all be colloquially aligned on. Gambling in regards to the regulated activity can’t simply mean “taking a financial risk in hopes of profiting”.
Mostly correct. Buying anything which retains value after the purchase is a wager. This includes shares in a company, collectible items, even a shipping crate of RAM.
In the case of TCGs, the bet is that the value of the cards contained in the pack exceed the money spent on the pack. This is very common. And within TCG communities, there is a common understanding that this is gambling.
That’s of course not to say that all purchases of a booster pack are with the intent to gamble. I’ve also played poker and blackjack for fun, and those games are full of wagers, bets, and outcomes. But the bar has never been that all possible reasons to do something are to gamble, just that gambling is a common motivation to do it.
And yet are not “gambling” as the colloquial understanding of the regulated activity stand, nor certainly things that people want to be covered under gambling regulations.
And since this is about what should fall under the regulated activity, irrelevant.
And since this definition is irrelevant to the regulated activity, it’s irrelevant to TCGs or loot boxes if you are pushing for those to be considered regulated gambling.
Yes, I believe I pointed out that you meant to say that, and why the simple act of taking a financial risk can’t be the definition of regulated gambling.
I didn’t say they were gambling, though trading shares is often associated with gambling. But in all of those examples, you receive something with value that changes in a way that is impossible to accurately predict.
And here you’re changing the topic to suit your needs. I replied to a comment discussing the definition of the word “wager”. As I’ve told you not long ago today, I don’t care much about the semantics of specific words. I’ll engage in the discussion though.
What? I’d like to remind you that you responded to me and solo’d out TCG boosters. In my response, I said very clearly that I am not a lawyer, nor do I make any claims as to what they should say in their case.
If you are only arguing about what is or isn’t legal, then you’re wasting your time. I’m not a lawyer, nor in a position to rule on laws. I don’t know if something gave you the impression otherwise.
If you’re arguing about what should or shouldn’t be legal, then it’s not an unpopular opinion that TCG booster packs should be regulated to some extent.
Anyway, I’m disengaging. As you mentioned before, we assume good faith here. That is my initial assumption, so I engaged with the discussion. At this point, I believe you are arguing for the sake of arguing.
Okay, I must have just imagined that.
If you can’t keep track of the claims you made, such that you contradict yourself within a single thread, please don’t accuse me of posting in bad faith.